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ARTICLE · 28 MAY 2025

Ultimate Guide To Impairment Testing As Per Ind AS 36

Corporate Professionals - Advisors & Advocates
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Impairment is a state when the carrying value of an asset is higher than its recoverable value Alternatively...

IndiaAccounting and Audit
Sanchit Vijay
Sanchit Vijay
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Introduction

Impairment is a state when the carrying value of an asset is higher than its recoverable value
Alternatively, we can express that the asset is considered to be impaired when the entity cannot recover the carrying value of the asset either by utilizing it in the ongoing operations of the business or by disposing of it in the end.

Objective

Ind AS 36, titled "Impairment of assets" lays down the principles for ensuring that assets are carried at no more than their recoverable amount. The objective is to prevent the overstatement of asset value on the balance sheet ensuring the accurate financial reporting by the entity, which may help in increasing the reliability of the investors over financials of the company.

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